Karachi, June 22, 2023 – At the launch of the “Energy Finance Outlook – A Case of Pakistan” study, speakers from diverse backgrounds have called upon international financial institutions to halt fossil fuel funding in Pakistan and redirect their investments towards renewable energy projects.
The event, held at a local hotel, saw the participation of academics, researchers, environmentalists, policymakers, and representatives from various organizations.
Chaired by Dr. Raza Ali Khan, Chairman of EMD, NED University, and environmentalist Nasi Panhwer, the session delved into topics such as “Energy Financing Trends in Pakistan” and “Climate Change and Environmental Sustainability.” Dr. Mirza Faizan Ahmed, a senior researcher and Assistant Professor at EMD, presented the study’s findings, while other notable speakers included Hussain Jarwar, CEO Indus Consortium, and Rashid Azeem, Divisional Head – Policy and Transformation, Compliance Group, UBL, among others.
The study, a pioneering effort on this subject, provides valuable insights into the financing flows of various energy sources between 2019 and 2022 and their implications for Pakistan’s future energy supply. It encompasses an in-depth analysis of financing data, policy reviews, and a detailed case study of Jamshoro Power Company Ltd., emphasizing the need for a comprehensive and integrated energy policy.
The study’s findings hold immense significance for policymakers and industry stakeholders, as they shed light on the opportunities and challenges that lie ahead. Despite previous attempts to address environmental concerns, Pakistan’s energy sector heavily relies on fossil fuels, which account for over 85% of the country’s energy supply. Thermal sources contribute to more than 60% of electricity production, while cleaner alternatives like wind, solar, and hydropower remain underutilized.
International entities such as China, the World Bank, and the Asian Development Bank emerge as major financiers in Pakistan’s energy sector. Hydropower has received the largest share of 40% financing, followed by coal, nuclear, transmission and distribution projects, and capacity building. Notably, the study indicates a potential decrease in the proportion of fossil fuels in the energy mix, despite expectations of increased coal usage.
Using Jamshoro Power Company Ltd. as a model, the study highlights the risks posed by environmental pollution and adverse health effects to the Indus River, local communities, and nearby universities. To address these issues and pave the way for a sustainable energy future, the study proposes several recommendations. These include the development of a comprehensive, long-term integrated energy policy encompassing all energy types and consumer sectors, prioritizing indigenization, financial sustainability, and environmental responsibility, and encouraging private sector involvement to reduce reliance on international financiers.
On the sidelines of the study launch, Grow Green Network, a collective of 20 civil society organizations from Sindh and Punjab working on environmental, humanitarian, and development issues, showcased their work. Their efforts focused on advocating for renewable energy financing and opposing fossil fuel-based energy development.
The study launch event and the contributions of various stakeholders underscore the urgent need to shift away from fossil fuel reliance and embrace sustainable renewable energy sources in Pakistan. It is hoped that international financial institutions will heed this call and align their funding strategies with the country’s environmental and energy goals.
